As Friday's deadline approaches for automatic spending cuts to the federal budget, no shortage of voices can be heard warning of the dire impacts, while political blame is being cast literally left and right. What does seem in short supply, however, are voices telling Americans the truth — that the "sequester," as the cuts have come to be known, is a clumsy way of doing exactly what the nation needs, and that any real budgetary reform that moves the nation away from its collision course with disaster will require some pain.
Frankly, that is a message that President Obama, as the nation's leader, should be touting. Instead, he remains in full campaign mode, saying this week, "There are too many Republicans in Congress right now who refuse to compromise even an inch when it comes to closing tax loopholes and special interest tax breaks."
Well ... there are, of course, too many Democrats, as well, unwilling to compromise on the needed reforms to entitlements and cuts to cherished programs. If it does nothing else, the sequester, with its blunt meat-ax approach to cutting $85 billion from the current budget, provides an accurate idea of what it will take to stem the rising debt that led Standard & Poor's to downgrade the U.S. credit rating in 2011.
It also provides a glimpse into how difficult it would be to reach any sort of agreement on a more rational set of cuts and reforms. The government sector is reacting to sequestration with warnings that verge on the hysterical. Meanwhile, few people are bothering to explain that the cuts would come from government growth, not from baseline budgets. Social Security and Medicaid would be off-limits for any cuts, and there is a cap as to how much Medicare could be affected.
Polls show most Americans would blame Republicans for any inconveniences the sequester might cause. Taking that cue, the president traveled to communities this week that rely on defense-related jobs, warning them of the layoffs that might come.
That is exactly the wrong message Americans should be hearing right now. They should be told honestly that the way to slow the growth of federal spending as a share of GDP is to cause a bit of pain now, which would lead to greater growth in private sector employment in the near future. When government spending declines, more money is available for the private sector. The real tax burden on Americans, which must include the deferred spending and interest payments that come from borrowing, would be reduced. When real growth takes hold, its momentum would push the percentage of government spending to GDP even lower.
The alternative is to risk American power and prestige as it is forced to borrow ever more to meet its expenses, lending credence to those who would remove the dollar as the world's leading currency.
In that sense, the sequester may be exactly what the nation needs right now. The president is right when he says it would be better to take a more rational approach to cuts. But the most rational approach would involve entitlement reforms, as well. In his first term, Obama appointed a commission, chaired by former GOP Sen. Alan Simpson and Clinton administration official Erskine Bowles, which reached that conclusion and promoted such a rational approach. The president and Congress ignored it.
Given the utter inability of current political leadership to draft a rational approach, the sequester is the next best thing. It won't be ideal, but it also won't be Armageddon, despite what politicians would have you believe.
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